Blizzard Watch in New England; Did Iran Hack Into U.S. Drone?; Panetta: "This Is Not A Game"; President Obama Talking Faith; Boy Scouts Delay Action on Gay Membership; Grammy Cover Up; Christie Blasts Former White House Doc; Biggest U.S. Airline in the Works?; Boeing to Conduct Ferry Flight

Aired February 7, 2013 - 06:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN BERMAN, CNN ANCHOR: Bracing for the big one. Two winter storms about to merge into a monster blizzard for much of the northeast, and it could bury some areas in two feet of snow, even more.

ZORAIDA SAMBOLIN, CNN ANCHOR: American spy secrets exposed. Iran claims it's hacked into a captured U.S. drone. We're going to have a live report.

BERMAN: Too sexy for TV? The Grammy Awards actually cracking down with a new dress code, but will big stars like Lady Gaga pay any attention?

SAMBOLIN: Fat chance.

BERMAN: So, good morning. Welcome to EARLY START, everyone. I'm John Berman.

SAMBOLIN: I'm Zoraida Sambolin. It's Thursday, February 7th. It is just about 6:00 a.m. in the East, so let's get started here.

We begin this morning tracking what could be an epic winter storm. A blizzard watch is in effect right now for parts of New England. A winter storm is on the way, and it could be historic, folks, because it is expected to drop more than two feet of snow in some places. This is beginning tomorrow.

So, let's get right to Indra Petersons. She is tracking this mess from the CNN Weather Center in Atlanta. Good morning.

INDRA PETERSONS, AMS METEOROLOGIST: Good morning. Yes, so, back February 17th and 18th of 2003, Boston did have a blizzard at a 27.5 inches of snow. This could rival that storm. So let's quickly talk about how this is expected to form. What we're watching is a low starting to form in the southeast.

As it makes its way up through the Carolinas, it will be a rain and wind event. Notice there's a second storm there. We're going to watch these two merge and form this large nor'easter that we're all monitoring, of course. We'll be watching the positioning of the low, if it's closer to the coastline we'll see more moisture and more snow amounts. The other thing we'll be watching is where that freezing line goes. If that cold air moves farther to the south, we'll, of course, see snow even farther south and potentially more snow in towards New York. It's not just affecting one area. We have the blizzard watches in effect for Friday afternoon through Saturday afternoon, but notice all of New England and the winter storm watch.

Even as that second system starts to make its way across, we'll talk about heavier snow amounts in through Michigan. So all of this is something we'll be monitoring. Of course, we'll talk about some of the amounts expected, notice even 8 to 10 inches possible in Michigan.

Out towards New England, 12 to 24 inches, so yes, 1 to 2 feet of snow, some models bringing it higher, some bring it lower. Then I take you through New York and we're talking about that freezing line. All of this makes a huge difference.

You could start off as sleet and transition to snow if it gets colder or if the freezing line is lower you'll see snow right from the beginning. We'll see some of those higher totals.

Of course, travel is going to be a big concern out there. These are the delays that we're expecting today. Some rain and snow in Chicago as this system makes its way across, of course, San Francisco on the west coast, also getting a little bit of rain.

But of course, if you have travel plans tomorrow definitely monitor the situation, especially Friday night through Saturday. You guys, you aren't going to be alone. I'm going to be in Boston as well.

SAMBOLIN: You're not going to be able to walk around.

BERMAN: These weather delays you're looking at now, these are like nothing compared to what they'll be tomorrow and Saturday.

SAMBOLIN: Thank you, Indra. Appreciate it.

BERMAN: We have another developing story this morning. U.S. secrets exposed. Iran claims it has decoded and now released footage from a downed U.S. drone. A man identified as a member of Iran's military narrated the black and white aerial footage as it was broadcast on Iranian state media.

He claims it is a drone that Iran downed in 2011. CNN cannot independently verify the authenticity of the video. We've also reached out to the Pentagon for comment, but we have not heard back yet.

Reza Sayah is following developments for us in Cairo. Good morning, Reza.

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Good morning, John. The Iranian government is already boasting about what appears to be this decoded video from this drone portraying this as a major intelligence victory over Washington. We don't know exactly what they have gotten from this drone when it comes to technology, but it does look like they have decoded video from the drone's camera.

They aired it on state media. That video was posted on YouTube. In it we see what appears to be black and white video, aerial surveillance video. The video is accompanied by a narrator identified as a general from Iran's revolution guard. The narrator describes what we appear to be seeing.

He says the drone is landing at the Kandahar Air Base, which is in Southern Afghanistan. In one portion of the video, the narrator says this. This air craft has had many flights in countries around Iran in operations that have taken place in Pakistan. This aircraft has provided guidance.

Again, CNN cannot independently verify the authenticity of this video, we're still waiting on comments by the pentagon, john, but it looks to be genuine. We stress it looks to be genuine. We look forward to see what the pentagon has to say -- John.

BERMAN: As you pointed out again and again, the U.S. has not commented to us about the authenticity of the videos. They could be fake. But if they are real, what does it say about the sophistication of the Iranian intelligence system?

SAYAH: It's too early to make that kind of assessment, John, because it's too early to figure out exactly what Iranian officials have extracted from this drone. This is obviously a high-tech machine, stealth technology. You can be sure Iran is trying to clone it, but we don't know if they have done that yet.

It looks like they have managed to decode the video. One thing you can be sure they'll do is they'll use this in the information war against the U.S. They will bolster their position that the U.S. is a bully in the region, meddling in sovereign affairs of other countries with drones and it's going to be part of the information war that these two countries have been locked in for a long time -- John.

BERMAN: Reza Sayah in Cairo for us this morning. Thanks, Reza.

SAMBOLIN: There's going to be a lot of talk about this here locally as well. Congressional lawmakers will get access to classified documents concerning the targeted killings of Americans overseas.

President Obama will release documents to two committees outlining the legal justification for drone strikes that kill U.S. terror suspects abroad. The administration's drone program has been shrouded in secrecy and criticized by many members of Congress.

The White House says more than two dozen senior al Qaeda members have been killed in drone strikes including one American citizen.

BERMAN: Meantime, the president's nominee for CIA director, John Brennan, has his confirmation hearing today, the drone issue almost certain to come up because Brennan was one of the architect's of the administration's drone policy.

As CNN's Barbara Starr tells us, he's about to feel the heat from senators on both sides of the aisle.

(BEGIN VIDEOTAPE)

ANNOUNCER: And Mr. John Brennan.

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): When President Obama's pick for CIA director heads to capitol hill today for his confirmation hearing, it's some in the president's own party that are threatening to hold up John Brennan's nomination.

Oregon Democrat Senator Ron Wyden telling reporters he would, quote, "pull out all the stops" to get answers about the legality of targeting Americans involved with al Qaeda overseas. In written answers to committee questions, Brennan didn't address killing Americans, but insisted all targeting is made on a case by case basis.

CHRISTOPHER ANDERS, ACLU: Senator Wyden was trying to find out that basic information and has been denied that. So, you know, the most basic questions about a program that John Brennan has been -- has been the architect of and the orchestrator of for four years, the most basic details of it have been withheld.

STARR: It's just one controversy Brennan faces at his confirmation hearing. There's his role in administration leaks about covert operations, like the cyber attack on Iran's nuclear program, and the use of a mole to infiltrate al Qaeda in Yemen. Senators want to know his knowledge of harsh interrogations when he was at the CIA during the George W. Bush years. Brennan said he was aware of the program but wasn't involved in it. He promised, "These techniques would not be used again by the CIA if I were the director."

SEN. JOHN MCCAIN (R), ARIZONA: Well, he says he had opposed, quote, "enhanced interrogations or torture", but there are statements that clearly he made several years ago where he supported it. I'd like to see those -- that issue resolved.

STARR: Outrage over the interrogation program scuttled Brennan's chances to lead the CIA in Obama's first term. But now, he says he's ready for the political heat.

JOHN BRENNAN, CIA DIRECTOR NOMINEE: Although I consider myself neither a Republican nor Democrat, I very much look forward to working closely with those on both sides of the aisle.

STARR: As President Obama's top counterterrorism adviser, Brennan continues to be seen as all powerful.

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: I think for sure John is regarded in terms of the intelligence community, even where he is now, as a first among equals.

STARR (on camera): If he's confirmed as director of the CIA, John Brennan will have a new boss. He'll now report to James Clapper, the director of national intelligence. But if there's covert action, some of the CIA's most secret activities, then Brennan will still have the authority to walk right into the Oval Office. Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

SAMBOLIN: Our thanks to Barbara. It's 8 minutes past the hour. Defense Secretary Leon Panetta gets fired up in his final days on the job, warning that we are on the brink of the most serious readiness crisis faced by the armed services in more than a decade, unless Congress takes action to stop across the board military budget cuts from taking effect on March 1st.

(BEGIN VIDEO CLIP)

LEON PANETTA, DEFENSE SECRETARY: This is not a game. This is reality. These steps would seriously damage a fragile American economy and they would degrade our ability to respond to crisis precisely at a time of rising instability across the globe.

SAMBOLIN: Even as budget cuts loom, the U.S. Air Force just renewed its NASCAR partnership with Richard Petty Motor Sports number 43 car. NASCAR says the Air Force will be the primary sponsor for two races associate sponsor all season long.

President Obama is expected to open up on his faith this morning as religious and community leaders gather for the 61st Annual National Prayer Breakfast. That's in a few hours from now.

It will be the president's first remarks to the faith community since he announced his support for same-sex marriage. The fellowship foundation which organizes this event has historically held conservative Evangelical views. And an ethics group says the foundation is linked to legislation in Uganda that would make being gay a crime that is punishable by death.

BERMAN: Some disappointment for gay rights supporters hoping to see the Boy Scouts and their long standing ban on gay members. Instead the organization's executive board tabled yesterday's vote on allowing gays in its ranks until their national meeting in May.

The scouts said the delay was due to the complexity of this issue. Later this hour at 6:40 Eastern, we're going to talk to Jennifer Tyrell who was dismissed as a den leader because she's gay.

All right, so the fashion police will be out in force for Sunday night's Grammy Awards. We're not talking about Melissa and Joan Rivers. No. Over the years we've seen some of the revealing, if not shocking looks at the Grammys, but this year, stars are being told to cover up.

That's because CBS has issued this rather incredible wardrobe advisory that includes, be sure that buttocks and female breasts are adequately covered. I'm reading this here. Thong-type costumes are problematic. Boy, are they ever.

Avoiding exposing bear flesh under curves of the buttocks. Bare sides or under curvature of the breasts is also problematic. Avoid sheer see-through clothing. I'm not going to read all this and the stars should cover their genitals. Wow. All I can say is, you know, you can read it here. These rules are crazy.

SAMBOLIN: This is incredible. Can we send them out, everything you refused to read this morning?

BERMAN: Do you think these people are actually going to obey those rules?

SAMBOLIN: No, I do not. I think that there are certain stars, this is a moment they live for and they're not going to obey those rules. What's going to happen to them? They'll do it. All right, so don't cross New Jersey's Chris Christie. Check this out.

SAMBOLIN: See the governor go off on the doctor that publicly criticized his weight. That's coming up.

(COMMERCIAL BREAK)

BERMAN: So welcome back for EARLY START, everyone.

And would you look at what one donut started? Chris Christie is hammering --

SAMBOLIN: Well, it wasn't one donut.

BERMAN: It was a very important donut.

Former White House doctor Connie Mariano -- Chris Christie is hammering her for going on TV saying she's concerned that he will die in office because of his weight. The war of words between Christie and a woman who has taken care of three sitting presidents began earlier this week after Governor Christie went on the David Letterman show munching on a donut conversation.

So, the governor called himself the healthiest fat guy you've ever seen. That triggered the doctor's comments and led to this really angry tirade from Governor Christie.

(BEGIN VIDEO CLIP)

CHRISTIE: She must be a genius. She should probably be the surgeon general of the United States, I suspect, because she must be a genius. I think this is -- listen, this is just another hack who wants five minutes on TV.

And it's -- and it's completely irresponsible, completely irresponsible. My children saw that last night. If she wants to get on a plane and come here to New Jersey and ask me if she wants to examine me and review my medical history, I'll have a conversation with her about that. Until that time, she should shut up.

(END VIDEO CLIP)

BERMAN: Christie later called Dr. Mariano. Listen to what she said to describe that conversation to CNN's Anderson Cooper along with her reaction to the governor's rant.

(BEGIN VIDEO CLIP)

DR. CONNIE MARIANO, FORMER WHITE HOUSE PHYSICIAN: Well, it was rather shocking to hear those things. I was in clinic, so I did not hear his broadcast, but he used some pretty strong words there. Out of deference to him, I'm not going to comment on that, but I can only share with you that that phone conversation when I think of it, the words gracious and appreciative do not come to mind.

(END VIDEO CLIP)

BERMAN: Dr. Mariano says she wants to see Christie run for president. She says she does not regret making the comments she made.

SAMBOLIN: And she did offer up for him to go out to Arizona to see her.

BERMAN: I don't think they'll be getting together.

SAMBOLIN: I don't think so either. But It would be fun to watch them together.

BERMAN: Richard Simmons weighs in on this feud between the governor and the doctor. You want to catch Soledad O'Brien's interview on the 8:00 a.m. hour of "STARTING POINT" this very morning.

CHRISTINE ROMANS, CNN BUSINES CORRESPONDENT: You know, he is so outspoken, a straight talker. She sounds like a straight talker. She gave straight talk about what she thought it was and he did not like her straight talk.

BERMAN: That's right. He's not -- you know, in this case, he thinks he's the only one allowed to be blunt.

SAMBOLIN: It's touching a nerve. It is touching a nerve.

Seventeen minutes past the hour. Let's get you up-to-date. Christine Romans with he top stories.

ROMANS: Good morning again, you two. A dangerous winter storm targeting the Northeast this morning and it could be epic. Parts of New England are already under a blizzard watch. Two feet of snow or more could fall in parts of Massachusetts and Rhode Island. That begins tomorrow. And much of the Northeast will be facing freezing rain and damaging winds. A Connecticut lawmaker who represents the Newtown district is calling for a sin tax on violent video games. This in the wage of the Sandy Hook school massacre. State Representative Debra Lee Hovey, a Republican whose district includes Sandy Hook, is proposing a bill that calls for a 10 percent tax on games rated mature with the proceeds funding mental health education about the dangers of violent entertainment.

Are you old enough to vine? Twitter's video watching and sharing application has been slapped with a 17-plus rating after several porn clips were uploaded. One of them accidentally ended up on the editor's picks page. That was quickly taken down. The year-old app was originally targeted to tweens 12 and up.

OK. Check out these cool pictures from NASA taken from the space station. What you're looking at there is the Caribbean sea near the northwest coast of Trinidad.

Do you see those ripples? Those are underwater waves or internal waves, as they call them. They're moving slowly hundreds of feet, hundreds of feet beneath the surface. They produce enough of the effect to be seen from space but only when the sunlight is reflected just right, like here. Very rare.

SAMBOLIN: Beautiful.

ROMANS: Hundreds of feet below the surface from the space station. Awesome.

BERMAN: Very well.

SAMBOLIN: Never think you'd be able to see that. Thank you, Christine.

ROMANS: You're welcome.

SAMBOLIN: All right. Two big airlines may soon become one. Details on the merger talks and what it could mean for you, coming up.

(COMMERCIAL BREAK)

BERMAN: Welcome back, everyone. We are minding your business this morning.

U.S. stock futures are slightly up this morning, ahead of the European Central Bank meeting later today. Investors are also watching for reports on first-time jobless claims and consumer credit. Those reports are out later today.

SAMBOLIN: And Christine Romans is here with a look at some potential big news in the airline industry.

ROMANS: Yes, this is the top story this morning in terms of the corporate world. It's American Airlines, AMR, that company is in bankruptcy, don't forget and U.S. Airways could be on the verge of merging. If they did, it would be the largest airline in the world. And it comes after, you know, five or six years of pretty big mergers. United/Continental right now is the largest. Delta/Northwest, you remember, merged in 2008.

What's going on here? Our affiliates are reporting there's a board meeting for AMR on Monday. "Wall Street Journal" is reporting this morning that they are racing to get details of a deal done.

We know that deals before with American haven't really been embraced altogether by the board because some people wanted to come out of bankruptcy as a stand-alone company and then maybe do a merger after that.

So, you have a couple of things here. You've got these industry pressures to merge to get bigger and also American is in the bankruptcy process and coming out of it. So, this would be an all stock deal, according to "The Journal", that would be executed as part of the reorganization, taking American out of Chapter 11 protection. And, again, "The Journal" is saying that they're working real fast to try to get this done.

Now, let me tell you about the other big air story of the day and that is Boeing. Following developments in Boeing this morning, we now know that the government has allowed -- will allow one ferry flight of a Dreamliner from Ft. Worth to Seattle, on some special conditions. They've got to check all the batteries, they've got to check all the cables, they have only the crew on board and this is to take a new plane for delivery for Boeing.

We also know the "Wall Street Journal" is reporting that Boeing is proposing a series of battery redesigns to try to get around this problem of the battery problem, which has grounded the fleet of 50 these Dreamliner airlines.

Remember, these are supposed to be the state-of-the-art, future, you know, highly complex electrical systems, very lightweight, long haul. It's a Dreamliner and it's been a nightmare liner. So, now, one of these -- one of these will be allowed to fly today.

If you look on FlightAware, you might be actually able to see it, which is sort of interesting as well. People are going to be tracking from Ft. Worth to Seattle it to see where that one is going.

BERMAN: All right. So, what's the one thing we need to know about our money?

ROMANS: In stocks, today, as you're jumping into the market, you should be aware, corporate insiders are jumping out of the market. A new report says corporate insiders are nine times more likely to be selling their company stock right now than buying it. This as individual investors as you can see there are rushing into stocks.

The first part of the year, individual investors plowed $17 billion into stocks after pulling money out last year.

Corporate insiders right now are selling, which is not really a surprise, think if you're an insider in the company and you see this big run-up in stocks, doubling since 2009, you might be saying New Year, I'm taking some off the table. Some in the markets are saying, no, that's a pretty good sale signal.